Uncertainty for golden quarter
Chamber says some businesses hurting, government reports tax revenues down
Businesses in the Friendly City are cautiously optimistic heading into the holiday season, according to Moose Jaw and District Chamber of Commerce CEO Rob Clark.
Clark said the business climate is not currently a uniform one.
“Walking around and talking to businesses, I get some mixed reviews. Some are doing really well and some are not doing as well as expected,” he said.
Some businesses in the city have been hurt by the fact that the area is not experiencing a typical winter. The sectors that have been effected by the warmer than usual conditions range from stores that sell winter clothing to snow mobile businesses and hardware stores.
“A lot of sectors are suffering just because of our climate at the moment,” he said. “Anything having to do with cold weather and snow are going to be a little soft at the moment.”
Businesses dependent on the cold weather are not the only institutions feeling a monetary pinch.
The Government of Saskatchewan released its mid-year financial report this week.
The report showed the province’s budget deficit sitting at $679 million, which is $6 million lower than expected at the start of the year. Revenues overall are down by $53 million from where they were expected to be. Revenues collected from personal income taxes are down by $110 million, while income taxes collected from corporations are down by $39 million, and revenues from sales taxes are $55 million less than expected. Tax revenues collected from fuel taxes were up by $20 million. Revenues from non-renewable resources were down by $24 million.
Clark said one of the biggest changes affecting business in the city in a negative way is the provincial government’s decision to raise and expand the provincial sales tax (PST).
“That’s probably the biggest contributor,” he said.
“I don’t think they really looked at it seriously enough when they consulted with anybody, and then they forecast these revenues and (people’s) spending habits change.”
Clark speculated that along with the hospitality sector, the insurance industry might also be hurting as people could be cutting back on the amount of insurance they are buying.
Kevin Haakenson, a co-owner of Bobby’s Place in Moose Jaw, agrees that the government’s decision to apply the provincial sales tax to restaurant meals was not well thought out and that the recent numbers released by the government are proof.
“Obviously some of their policies are not working properly,” he said.
Haakerson said that since the decision was made to apply sales taxes to restaurant meals, his business has been down and has not picked up as the holidays are nearing.
“My sales are still down, they have not recovered from April,” he said.
Generally, around this time of year, Bobby’s sees an increase in business, as people tend to be out and about more. The bar also generally plays host to a variety of events, like office Christmas parties. But according to Haakenson, this is not the case this year.
“We’ve had fewer people approach us about having Christmas parties at our place,” he said.
With business being down right now, Haakenson said he is hoping that if he doesn’t see a holiday bump that he won’t see a slide come in January, as has generally been the case in the past. Despite the drop in sales, his bar is still able to hang in, which he attributes to people in the city making sure to support local business.
“We’re still doing (well) … the people of Moose Jaw have supported us, and I appreciate that,” he said.